Cryptocurrency is a lucrative investment, no doubt. Prior to making any investment, it is highly recommended to assess the risks and any important information associated with it and invest only if you can handle the risks. For starters, Bitcoin isn’t the only cryptocurrency out there, educate yourself with the basics of cryptocurrency and the blockchain technology that powers it.Cryptocurrency is a lucrative investment, no doubt. Prior to making any investment, it is highly recommended to assess the risks and any important information associated with it and invest only if you can handle the risks. For starters, Bitcoin isn’t the only cryptocurrency out there, educate yourself with the basics of cryptocurrency and the blockchain technology that powers it.
Identify your goals, whether you want to trade crypto for a short term or long term, this is dependent on the time you can invest and the knowledge that you’ve acquired. You cannot judge a cryptocurrency by its cover, attractive visuals, promising returns do not guarantee anything. This is popularly termed the “bling bling syndrome”, as always read between the lines, check if the background of the company is trustworthy and legit. Hype buying or panic selling is another common mistake by investors, who are usually just starting out, understand how the crypto market functions and pick the right time to invest in a cryptocurrency, hype does not define anything. Market movements and emotions are key factors that shape a crypto investor, the fear of failure results in not winning enough, make an objective or technical analysis instead. Set aside any form of greed, this will not only make your mind hazy, but will most likely lead to terrible and avoidable decisions.
Before signing up on any platform as an investor, compare the best available options, do not pay more than what you are required to pay. The last common mistake we would like to point out is that many end up pouring their savings into one cryptocurrency or one type of investment, this is a big NO, a diverse investment portfolio is a must, when you start this adventurous and hilly journey.
If you are hesitant to start a crypto investment, you can always find safer alternatives on Bitbns such as our Fixed Income Plan (FIP) that guarantees a fixed rate of interest on your investment.There are any number of mistakes someone smart can make, but I will focus on only one, as even I find this to be a challenge (I get reminded of this in comments to my answers!)
One big mistake is to think that because you are an expert in a field, you are an expert in everything.
In other words, the Dunning-Kruger effect can affect smart people just as much as it does dumb ones. Perhaps even more so!
The irony is that the higher the education you have, the more narrow the focus becomes. Yes, you have learned to research. That is good, of course. But you have not researched every possible field of knowledge that exists.
Even within a specialty, that can be dozens of sub-specialties that you can become an expert in.
In medicine, for example, we have doctors that specialize in various part of the body. Each one knows something about the entire body, but only some of them can replace heart valves, and a few others can remove tumors from the brain.
But that does not make you an expert on “climate change” or monetary policy. Even if you are smarter than them by “30 IQ points,” They have studied the subject, and you have not.
Of course, we also have generalists vs specialists, and some hybrids like myself that have expertise in several subjects (manufacturing engineering and project management).
But even in my case, I work in one industry niche as a manufacturing engineer. If I move to another company such as semiconductor or steel manufacturing, I’d have to learn all sort of new things to get to the performance level I currently work at in my present niche. It would literally take years to get there!
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